Coverage
Motor Truck Cargo Insurance
Protects the freight you haul against loss or damage from the moment it loads until final delivery.
Motor truck cargo insurance covers the value of goods you are transporting on behalf of shippers. As a for-hire carrier, you are legally liable for the freight in your custody under the Carmack Amendment, which establishes strict liability for loss and damage during transit. Cargo insurance transfers that financial risk to your insurer, covering claims for stolen, damaged, or destroyed shipments up to your policy limit.
What It Covers
Motor truck cargo insurance covers the shipper's goods while they are in your care, custody, and control during transit. Covered perils typically include collision, overturning, fire, theft, loading and unloading accidents, and weather-related damage. Most policies are written on a broad form or all-risk basis, meaning they cover all causes of loss except those specifically excluded.
Coverage begins when freight is loaded onto your vehicle and continues until it is delivered to the designated consignee. Some policies extend coverage to temporary storage at terminals or warehouses during the normal course of transit. Refrigeration breakdown coverage, also called reefer breakdown, is available as an endorsement for temperature-sensitive loads.
Standard exclusions typically include losses due to improper packaging by the shipper, inherent vice of the cargo, shipper fraud, acts of war, and nuclear hazards. Understanding your policy exclusions is essential because a denied cargo claim comes directly out of your pocket and can severely damage your relationship with shippers and brokers.
Who Needs It
All for-hire motor carriers need cargo insurance. While the FMCSA does not mandate specific cargo insurance limits for most carriers, the legal liability you assume under the Carmack Amendment means going without coverage is an enormous financial gamble. A single truckload of consumer electronics, pharmaceuticals, or industrial equipment can easily exceed $200,000 in value.
Brokers and shippers universally require cargo coverage as a condition of doing business, with $100,000 being a common minimum requirement and many requiring $250,000 or more. Owner-operators leased to a motor carrier are typically covered under the carrier's cargo policy while under dispatch, but should verify this coverage and understand any gaps.
Why It Matters
Under the Carmack Amendment, you are liable for the full value of freight that is lost or damaged while in your possession, with very limited exceptions. Without cargo insurance, a single stolen load or a reefer failure on a high-value perishable shipment can wipe out months of operating profit.
Cargo claims also have a reputational dimension. Shippers and brokers track carrier claim histories, and repeated uninsured losses signal an unreliable operation. A strong cargo insurance program demonstrates professionalism, protects your balance sheet, and keeps you competitive when bidding for premium freight.
Key Coverage Features
- ●Broad form or all-risk coverage for most causes of freight loss and damage
- ●Coverage from loading through final delivery at destination
- ●Refrigeration breakdown endorsement for temperature-controlled loads
- ●Debris removal coverage for clearing a spill after an accident
- ●Earned freight charges reimbursement when a load is a total loss
- ●Coverage limits from $100,000 to $500,000 or higher based on the value of freight you haul
- ●Per-vehicle and per-occurrence limit options to match your exposure